Disclaimer: This article is for general information only. It isn’t legal, financial or tax advice, and we aren’t attorneys, tax professionals or financial advisors. Credit card terms, lender offers and debt collection laws change, and many of them differ by state. Check the details with the issuer or lender, and consider talking to a nonprofit credit counselor or a licensed attorney about your own situation. We don’t recommend or endorse any debt relief company.
“Debt relief” covers a lot of ground. It can mean a phone call to your card issuer, a plan run by a nonprofit counselor, a loan, a negotiated settlement or bankruptcy. Companies also use the term in ads, and some of them make promises they can’t keep.
This article is a map of your options, from the least drastic to the most. Each section is short and links to a deeper guide. If you want help choosing between them, see our article on the best way to pay off credit card debt.
The short version
- Start with the options that cost the least: talking to your creditors and making your own plan.
- A nonprofit credit counselor can review your whole situation and explain your options.
- Settlement and bankruptcy can reduce what you owe, but both carry real costs for your credit.
- According to the FTC, only scammers charge fees before they settle your debts or enter you into a debt management plan.
- No one can honestly guarantee to settle all of your debts.
What “debt relief” means, and what to watch for
The FTC describes debt relief services as offers to negotiate with your creditors to settle or reduce what you owe. The agency has brought many cases against companies that charged fees and delivered little.
The FTC lists these signs of a scam: they want fees before settling any debt or entering you into a debt management plan, they guarantee to settle all your debts or get you fast loan forgiveness, they try to enroll you without reviewing your finances, and they tell you to stop talking to your creditors without explaining the consequences. If you spot a scam, report it to the FTC at ReportFraud.ftc.gov and to your state attorney general.
Option 1: Talk to your creditors
This is the cheapest option, and it works best early. The FTC advises calling the creditors you owe, before a debt collector gets involved, telling them what’s going on and trying to work out a new payment plan with payments you can manage. You can ask for a lower interest rate and propose a payment plan you can afford. You don’t need to pay a company to do this for you.
Keep notes on who you talked to and what you agreed, and ask for any agreement in writing.
Option 2: Make your own payoff plan
If you can pay more than the minimum, a plan can get you out of debt without involving anyone else. Our step-by-step plan to pay off credit card debt covers budgeting and paying more than the minimum, and our article on snowball vs. avalanche helps you choose an order. For help staying on track, see how to get out of credit card debt.
Option 3: A balance transfer
A balance transfer moves debt to a card with a lower promotional rate. It works best if you have good credit and can pay most of the balance before the promotion ends. There’s usually a fee. See what a balance transfer is and how to do one.
Option 4: A consolidation loan
The FTC explains that a debt consolidation loan combines your debts into a single loan with one monthly payment. You might use a personal loan from a bank or finance company, a second mortgage or a home equity line of credit.
The risks matter. Some of these loans require your home as collateral, so you could lose your home if you can’t make the payments. Most have costs beyond interest. The FTC notes you may pay “points,” where one point is one percent of the amount you borrow. Do the math to see whether it’s worth it. Our guide on how to consolidate credit card debt walks through the steps, and our guide to a loan to pay off credit card debt covers the types of loans and who qualifies.
Option 5: Nonprofit credit counseling and a debt management plan
A credit counselor reviews your income, expenses and debts and helps you make a plan. The FTC says a good counselor spends time with you, asks about your finances and helps you make a plan that works for you.
If a debt management plan fits, here’s how the FTC says it generally works: the counselor sets up a payment schedule with you and your creditors, who may agree to lower your rates or waive certain fees. You deposit money each month with the counseling agency, which pays your unsecured debts, such as credit cards, according to the plan. It isn’t a loan.
The trade-offs:
- A plan can take 48 months or more, the FTC says.
- You might have to agree not to apply for or use more credit until it’s finished.
- It requires regular, on-time payments.
- It doesn’t help everyone, and a counselor who says it’s your only option without reviewing your finances isn’t a good sign.
The National Foundation for Credit Counseling (NFCC) says that working with one of its agencies on a plan may bring reduced or waived finance charges or fees and fewer collection calls.
Counseling isn’t free everywhere. The FTC says a nonprofit label doesn’t guarantee that services are free or affordable, so ask about fees. It suggests asking: What will you do to help me? How much will I have to pay? Do you have free education and information? Are you licensed to work here? A good counselor won’t promise to fix everything or charge you before doing anything.
Option 6: Negotiate a settlement yourself
You can ask a creditor or collector to accept less than you owe. The FTC says you can try this yourself instead of paying a company. A settlement for less than you owe can hurt your credit, and the forgiven amount may be taxable. See our guide on how to negotiate a settlement yourself.
Option 7: A debt settlement company
For-profit companies offer programs in which you save money in a dedicated account while they try to negotiate with your creditors. The FTC says these programs often encourage you to stop paying your creditors, which can mean late fees, a damaged credit score, collection calls and lawsuits. It also says a company can’t collect its fees before it settles your debt. Read our article on how credit card debt settlement works before you consider one.
Option 8: Bankruptcy
The FTC calls bankruptcy generally a last option because of its long-term effect on your credit: the information stays on your credit report for 10 years. Still, it can offer a fresh start.
Here’s what the FTC says about it:
- Two main types. Chapter 7 generally involves liquidating assets that aren’t exempt. Chapter 13 lets people with steady income keep property and pay off some debts through a court-approved plan over three to five years.
- What it can do. Both types may discharge unsecured debts like credit card and medical debt, and stop foreclosures, repossessions, garnishments and collection activity.
- What it doesn’t erase. Child support, alimony, fines, taxes and most student loans, unless you can prove undue hardship.
- Before you file. You must get credit counseling from a government-approved organization up to six months before filing. For Chapter 7, you must also pass a means test.
- After you file. You must take a debtor education course.
- Costs. The FTC says filing fees are several hundred dollars and attorney fees are extra. The most recent federal schedule we found, effective December 2023 and published on a bankruptcy court’s website, lists $338 for Chapter 7 and $313 for Chapter 13. Courts may let you pay in installments, and in some Chapter 7 cases may waive the fee. Check the current fee.
Talk to a licensed bankruptcy attorney in your state before you decide. Many people find a first consultation helps them understand whether bankruptcy fits.
Your options side by side
| Option | What it does | Main cost | Main trade-off |
|---|---|---|---|
| Talk to your creditor | May lower your rate or payment | Free | No guarantee |
| Own payoff plan | Pays down debt on your schedule | Interest until paid | Needs steady payments |
| Balance transfer | Moves debt to a lower promotional rate | Transfer fee | Rate rises after the promotion |
| Consolidation loan | One loan, fixed payment | Interest, possibly points | Secured loans put your home at risk |
| Counseling and debt management plan | Lower rates through a nonprofit agency | Possible fees | Can take 48 months or more; may limit credit use |
| Settle it yourself | Pays less than you owe | Credit damage; taxes | Creditors don’t have to agree |
| Settlement company | A company negotiates for you | Fees after settlement | Credit damage, lawsuits, taxes, scams |
| Bankruptcy | Court process that can discharge debt | Filing and attorney fees | Stays on your credit report for 10 years |
How to check any provider
Before you give anyone money or personal information:
- Ask for their fees in writing and when they charge them.
- Ask what they’ll do for you, specifically.
- Search the company name plus “complaint” or “review,” and check with your state attorney general and local consumer protection agency.
- Don’t sign anything you don’t understand.
- Walk away if they guarantee results, pressure you or ask for money upfront.
What about debt forgiveness?
Some creditors will agree to accept less than the full balance, and bankruptcy can discharge some debts. But no one can guarantee that your creditors will forgive your debts. If a company says they can, treat that as a warning sign. Forgiven debt may also be taxable. The IRS says canceled debt is generally taxable unless an exclusion applies, such as insolvency or bankruptcy. Our article on credit card debt forgiveness explains what’s real and what isn’t.
Frequently asked questions
What is credit card debt relief?
It’s any way of reducing the cost or the amount of your credit card debt, from a lower interest rate or payment plan to settlement or bankruptcy. The term is also used in advertising, so check what a company is actually offering.
What’s the cheapest way to get relief?
Calling your creditors. It costs nothing, and the FTC says you can do it yourself. A nonprofit credit counselor is the next step if that isn’t enough.
Is debt relief a scam?
Some of it is. The FTC says that only scammers will collect fees before settling any debts or entering you into a debt management plan, and that only scammers guarantee to settle all your debts.
Does debt relief hurt my credit?
It depends on the option. Settlement programs and missed payments are likely to hurt it, according to the FTC. Bankruptcy stays on your credit report for 10 years. A payoff plan with on-time payments doesn’t hurt it.
Should I use a debt relief company?
Be careful. The CFPB says that in many cases a debt settlement company won’t be able to settle your debt for you anyway. You can do much of what they do for free, or work with a nonprofit credit counselor.
How do I find a credit counselor?
The FTC suggests credit unions, universities and military personal financial managers, and says to interview a few counselors. The U.S. Trustee Program keeps a list of agencies approved to give pre-bankruptcy counseling, though it doesn’t endorse any one of them. See also our complete guide to credit card debt.
Sources
Information was checked in October 2026. Rules, fees and offers change, so verify current details before you act.
- How To Get Out of Debt, Federal Trade Commission, Consumer Advice
- Debt Relief and Credit Repair Scams, Federal Trade Commission
- Debt Management Plan, National Foundation for Credit Counseling
- How do I negotiate a settlement with a debt collector?, Consumer Financial Protection Bureau
- Topic no. 431, Canceled debt: Is it taxable or not?, Internal Revenue Service
- Filing Fees for Chapter 7 and Chapter 13, U.S. Bankruptcy Court (fees effective December 2023)